Author
Topic: The problem with online ads (Read 5957 times)

Some very wise words from Clive Thompson over at Wired magazine on the subject of charging for your software or service. It's a very blunt assessment of the whole problem with the notion of "monetizing" as opposed to selling something.

This very short article is called: Clive Thompson on the Problem With Online Ads. And it should be required reading for anybody who is considering some of the nonsense passing for common wisdom about online revenue opportunities. (except follows)

Quote

I predict that in 2050, we’ll look back at the first 20 years of the web and shake our heads. The craptacular design! The hallucinogenic business models! The privacy nightmares! All because entrepreneurs convinced themselves that they couldn’t do what inventors have done for centuries: Charge people a fair price for things they want.

I think the mix is in the middle somewhere. There are so many thousands of "Things" out there in Internet Land, that we need a lot of them to be free. I would like to suggest that the commitment goes the other way too - if you are charging money, then the quality needs to be higher than the "free" versions.

I'll throw the wrinkle in that the growing corruption on the Govt side is interfering too.

New topic, based on a brainstorm I just had. The problem with ads is that they're "Guess-Push". "Well, since he doesn't like ThisRandomAd about Laundry Cleaners, let's show him one about a Barbie Doll!"

I'll gladly pay for something I use in order to avoid being pestered with ads. What I really object to is a growing desire to get people to accepts ads as "just one of those unavoidable things" that make up what we call human existence. I say this because I'm starting to see (mostly in media and software products) where it's reaching the point where you get ads no matter what.

Public television is a good example. They're non-commercial - whatever that means. It doesn't mean they're commercal free. There are ads. And you're pestered with constant "pledge drives" (i.e. demands for ransom money) when you want to watch a show.

Time was when you'd only be subjected to PBS's unique brand of self-righteous plead/demands for viewer support once - and later twice - per year. Now you get "mini-drives" and "special pledge week" appeals that occur with increasing regularity. I don't know if this is the norm for the rest of the country, but where I am we average about one beg-a-thon per month. That alone would be annoying enough. Especially once you have made a contribution like I (up until this year) always have.

But now, our local PBS affiliate staggers it's fundraising efforts with the national franchise such that it's more like every other week somebody from public television is passing the hat for something.

Same thing happened with cable. You paid to get uninterrupted ad-free program viewing. (Yeah right!) That was the whole selling point of "pay-TV" as it used to be called. We soon got ads between shows. And although there are still many shows that run programming "uninterrupted" we now get to live with friggin' animated banner bars and character walk-ons in the lower third of the screen advertising upcoming shows or contests. And lately that seems to be changing courtesy of Conde Nast who has been placing some "related product" ads in those spaces on some of its shows. I'm guessing if there isn't sufficient viewer backlash they'll expand the practice shortly.

A lot of software is now doing the same thing. When you buy a registration code, you don't get a sanitized installer that requires a registration code in order to run. You get the same trialware edition which you can unlock with the code - but not before you get to navigate the trick logic screens that try to get you to install additional toolbars, tracking software, and crapware. Some also try to get you to change your default homepage for good measure.

My favorite offender is FL Studio. Even when you buy it directly from them, you're still given the time limited demo software to install. This can later be 'unlocked' with the registration code they send you. But not before Open Candy gets loaded and does its (IMO sneaky) thing as part of the install. I'm sure companies that do this will cite the efficiencies and necessity of only having one product installer to maintain - to which I reply "Bullshit!" If it's difficult to maintain an installer, it's even more effort to have to integrate it with an adware wrapper.

Gerry Weinberg observed how some restaurants attempt to make a virtue out of the lack of efficiency in their kitchens by printing things on the menu like: Please be patient. Good food takes time to prepare. Unfortunately, that argument doesn't hold completely true when you consider that while it may well take time to prepare a good meal - it takes even longer to burn the sauce. So please don't tell us it's too difficult to provide a "paid-for" installation package to customers that's separate from the one that gets put up on the web for free download. You're speaking to adults here.

It will only be a matter of time before ad banners become the norm on all media products (including the ones we've paid for up front) if we don't object enough.

I don't see the difference in business tactics. Pinboard owner is being opportunistic here. He's not promoting service because it is good but he want people to use it because it is adless. That's business tactic as sleazy as any other business. Who knows this model will takeoff somehow (like Opencandy)? Create paranoia against free services with legit privacy issues and then ask users to jump over.

Support Direct via Twitter - take a look to see how I interact with users.

Money A credible, working business model for the long term.

Please skim over the following to get an idea of how the site works:

I don't recall anybody there making an argument that it's better because it's ad free. I don't even think that's mentioned.

It's also NOT free. It has a one-time sign-up fee (currently $9.67 USD). And it doesn't offer a free trial period - although you can get a refund within the first 3 days following your sign-up.

Quote

Why should I pay for bookmarking?

Pinboard is different from other bookmarking sites in that I charge a small, one-time signup fee of around $10. This actually has numerous benefits for my customers:

The site has never had link spam. I can afford to run it on very fast hardware. I can afford to hire outside contractors where appropriate. I am able to devote all my time to working on Pinboard, rather than looking for ways to pay for Pinboard. There are no outside investors to answer to. There's no incentive to sell the website to someone else, who might not have the same vision for it. And I will never show you ads or resell your data.

Moreover, the project is sustainable. There have been many social bookmarking sites that either ran out of money or got bought by companies that then shut them down. It makes no sense to offer a personal archive if you don't have a plan to keep it running as an independent entity in the long term.

It boils down to this: running a bookmarking site costs money. If you're not paying for it, then someone else is, and their interests may not be aligned with yours.

and

Quote

How do I get a refund?

Pinboard accounts are fully refundable within three days of signup. Send me an email and I will issue a refund through the payment provider and close your account.

FWIW I use Pinboard and I'm very happy with it. One of the better sub-$10 purchases I made. I like it enough that I've also gifted accounts to a few people I know who could benefit from having one, but who also genuinely couldn't afford the modest fee Pinboard charges.

And it's not just me that liked what they're doing. Time, Wired, and The Economist magazines all had good things top say about it.

I don't recall anybody there making an argument that it's better because it's ad free. I don't even think that's mentioned.

Check the article.

Quote

On the surface, this seems suicidal. Why charge money when your massive competitor is free? Ceglowski has a one-word answer: advertising.

Quote

It's also NOT free. It has a one-time sign-up fee (currently $9.67 USD). And it doesn't offer a free trial period - although you can get a refund within the first 3 days following your sign-up.

I never said anything about their model being free or paid. I just pointed out their business model which is based on flaw in one popular revenue generation model : advertising and his attached (yet hidden) plug of "upsell" to it.

Quote

And it's not just me that liked what they're doing. Time, Wired, and The Economist magazines all had good things top say about it.

Sorry to say but this looks like argument from authority. If tomorrow time,wired and other news agencies start to talk against free software, are we going to quote them again with same respect and authority in other context? Let's just keep journalism where they fit to pitch readers for- critic and praise. That's not all there are some 'help-a-journalists' sites where you can connect with these brands and spread the word about your startup. I came across this type of promo stuff while observing picplum startup. I usually don't pay attention to testimonials from news sites or paid authors.

Quote

So where's the "sleazy" tactic you're talking about?

quote from website : Should you switch from delicious? Of course you should!

I think you're not paying attention to this type of business model where you figure out the flaw of your competitor (in this case ads) and hit on them until you get some customers under the disguise of being a good guy. Pinboard owner did exactly the same. His product is not good on it's own but because the competitors are showing ads or time and wired is talking about it and some random customers are happy with it. That's not all there's an hidden upsell too. Archival account. I can understand financial situation of startups where they need money for BW/HD space but then again upsell should be open on front page too instead of faq, if the tactic to attract customer isn't sleazy.

These type of tactics are used by many sleazy marketers on this forum. One product connected with another and so on. I have seen more than 100 marketers talking against wordpress, artisteer and many other products only to see that they're offering some similar product. Sure, It's not sleazy if you're not checking the part - "Delicious is bad for showing ads, that's why you should use my product".

It's like microsoft talking against free software and open source five years ago with tagline -"Open source is buggy, that's why Microsoft is better". I remember the day when one microsoft employee in daniweb said (referring to thread made in 2006) " I get paid to write code and docs, I am not going to help with pointers, figure out your own " and then ends up in stackoverflow sharing code with active participation. You know where these type of tatics to show your competitor bad stand today, If you're paying attention. Especially in case of all the brands which were once against free or open source software in past.

You don't become a better by showing negative areas of your competitor. You don't become better when paid press release shows your product good or some random customer posts testimonials. If the product is good, you don't have to do anything. It sells.

He's using typical sales trick - show flaws in your competitors and you become a savior. It was used by many marketers and so people don't find it sleazy. I wonder how you people think if tomorrow apple and Microsoft come up with headlines - "Free software is for ghettos, Get class with our software". Are we going to back that claim with testimonials of time, wired and other press sites? Is their claim not part of this age old sleazy trick?

Forgive me If I'm digging too much into their sales and copy-writing tricks and your expectation is just "point-click-buy-solve problem" from such startups.

You can't build geocities by charging people 9.95$ per month. You can't build free facebook by charging people, you can't build pinterest by charging people. Sure, most of us here hate ads and we are leaning towards using ad block plus but ad-free paid sites don't build communities in millions. That is one more point I can add to this thread.

@mahesh2k - I'm not quite sure where you're getting half the stuff you're talking about in your above comment. But I'd like to politely suggest you're almost completely misreading and misinterpreting what's being said here.

One minor point. You also seem be merging Clive Thompson and his article with words from the people who do Pinboard. Clive Thompson isn't associated with Pinboard. He's writing an editorial and using Pinboard as his example of why a paid service is a better and more workable approach than ad supported business models.

I think a helpful way to read this debate is that this article is not addressing at all the issue of truly free/opensource services and products that are released without any one trying to make a business out of it.

It's really just drawing attention to the fact that we are pretty deep in the rabbit hole now where almost everything is trying to be (or appear to be) free to users, while setting up this secondary system for trying to make money from their users by advertising to them (or selling statistics on their behavior or finding ways to get them to buy other stuff, etc.).

And it's trying to say that perhaps things have gone too far in this direction, and it's time to consider the much more straightforward concept that if you are going to try to make money from your users, maybe the cleanest way to do so is to charge them for the service you are providing -- a concept that's starting to seem novel in 2012..

Again -- this is not knocking open source or free software. It's simply saying, if you're going to try to make money from your users -- maybe it's better to do it directly.

I'm relating Clive's article with this and this and the stuff that I posted in previous post. Pinboard owner knocked not only free software but freeware model of making money. I agree that every revenue generation has it's set of cons. But I have to disagree with clive's point quoted in first post of this thread. He's assuming a lot in his posts regarding paid models. Web is usable not because of paid models but because large part of web is free or ad-plastered. I disagree with the people who think only one model answers everything, in this case 'Paid model'. Free model, ad-plastered model, paid model all play their roles to run better web based startups. In fact there are people who do much better in free model compared to paid model, example - Wordpress and countless products which are free and their creators are making money much more than pinboard owner. They don't advertise with slogan - "X competitor product is paid service, still can't guarantee privacy and so you should choose my service". Another point related to privacy - not a single paid service on web can't guarantee it, pick any random top brand and they have security issues, leaked user data issues, bugs and whatnot. Paid service also collects personal data and monitors user behavior just like any other service on web, look around we have call centers set up to annoy people based on personal information. So clive fails to explain that part as well.

Assume "0% Free or Ad based" service in the following chain and try to see what point clive is trying to put in that article.

Sorry. I'm still a little lost. While these may be "fair points" I don't really think they're talking about the same things Clive Thompson's article is talking about - unless you want to allow for a large amount of (unjustifiable IMO) "reading into" what was actually said.